Penske Automotive Group, Inc. · NYSE:PAG
Penske Automotive — Q3 2023 Earnings Presentation
39 slides from Penske Automotive's earnings presentation, Oct 25, 2023
Slide 1: Third Quarter 2023 Financial Results
THIRD QUARTER 2023 FINANCIAL RESULTS October 2023
Slide 2: Forward-Looking Statement Disclaimer
FORWARD-LOOKING STATEMENT DISCLAIMER Statements in this press release may involve forward-looking statements, including forward-looking statements regarding Penske Automotive Group, Inc.'s financial performance and future plans. Actual results may vary materially because of risks and uncertainties t
Slide 3: Company Overview
COMPANY OVERVIEW A Diversified Transportation Services Company Headquartered in Bloomfield Hills, MI USA As of September 30, 2023: 28,000+ $22.3B Employees worldwide 9M YTD revenue 336 4 9 Retail automotive Continents Countries franchised dealerships Markets in Markets Outside North America of North
Slide 4: Retail Automotive Brand Mix
RETAIL AUTOMOTIVE BRAND MIX 71% 20% 1% 8% Premium Volume Non-U.S. U.S. CarShop 25% (YTD as of September 30, 2023) (% of Total Worldwide Automotive Dealership Revenue) 11% 10% 9% 8% 8% 8% 7% 4% 3% 3% 2% 1% 1% Other PENSKE AUTOMOTIVE GROUP / 4
Slide 5: Capital Allocation History
CAPITAL ALLOCATION HISTORY 2018 2019 2020 2021 2022 (In Millions) Dividends $121 $131 $68 $143 $154 Cap Ex $306 $245 $186 $249 $283 Share Repurchases $75 $174 $35 $294 $887 Acquisitions $309 $327 --- $432 $393 PENSKE AUTOMOTIVE GROUP / 5
Slide 6: Shares Outstanding
SHARES OUTSTANDING (Outstanding shares as of 12/31 each year) (In Thousands) 9,000 84,546 8,214 8,000 80,000 81,084 7,000 80,392 6,000 60,000 77,574 5,000 3,987 69,681 4,000 40,000 67,217 3,262 3,000 20,000 2,691 2,000 1,587 1,000 1,026 0 0 2018 2019 2020 2021 2022 Sept. 2023 Outstanding Repurchased
Slide 7: Historical Long-Term Debt and Leverage
HISTORICAL LONG-TERM DEBT AND LEVERAGE (USD in Millions) $2,500 $2,360 3.5 3 $2,000 2.9x $1,690 $1,707 $1,622 2.5 $1,500 $1,474 2 $1,000 1.8x 1.5 1 $500 1.0x 0.8x 0.8x 0.5 $- 0 2019 2020 2021 2022 Sept '23 Debt Leverage* *Refer to non-gaap reconciliation schedules on pages 36-38 PENSKE AUTOMOTIVE GR
Slide 8: Q3 2023 & 9M 2023 Review
TRUCK SALES -| PARTS & SERVICE | — 4 Q3 2023 & 9M 2023 REVIEW
Slide 9: PAG Q3 and 9M YTD Performance Summary
PAG Q3 and 9M YTD PERFORMANCE SUMMARY Q3 Total Revenue ($ in Billions) Q3 Income ($ in Millions) Q3 EPS $7.4 $6.9 $355 $340 $4.46 $4.61 $6.5 $263 $3.92 Q3 '21 Q3 '22 Q3 '23 Q3 '21 Q3 '22 Q3 '23 Q3 '21 Q3 '22 Q3 '23 9M Total Revenue ($ in Billions) 9M Income ($ in Millions) 9M EPS $22.3 $1,082 $14.31
Slide 10: Q3 Key Highlights
Q3 KEY HIGHLIGHTS Retail Automotive (Q3’23 vs Q3 ’22) Retail Commercial Trucks (Q3 ’23 vs Q3 ’22) Total same-store units delivered (including Agency) Retailed 5,556 new & used trucks, -8%; same-store units -11% increased 10% to 119,921 Same-store service & parts revenue +1% Same-store retail
Slide 11: Q3 2023 Global Revenue
31% $7.4 61% Billion Q3 2023 8% GLOBAL REVENUE North America United Kingdom Other International PENSKE AUTOMOTIVE GROUP / 11
Slide 12: 9M 2023 Revenue & EBT by Segment
SEGMENT SEGMENT REVENUE EBT 15% 12% $22.3 $1.2 20% 86% BILLION 62% BILLION 2% 9M 2023 3% REVENUE & EBT BY SEGMENT Retail Automotive Retail Commercial Truck Non-Automotive Penske Australia Investments* Power Systems Commercial Trucks *Consists of non-automotive equity method investments which include
Slide 13: Q3 & 9M Performance Highlights
Q3 & 9M PERFORMANCE HIGHLIGHTS ($ in Millions, except Per Share Amount) Q3 ‘23 Q3 ‘22 Chg 9M ‘23 9M ‘22 Chg Revenue $7.4B +8% $22.3B +7% $6.9B $20.8B Excl F/X $7.3B +5% $22.4B +8% Retail Auto Same-Store Revenue $6.2B +9% $18.4B +6% $5.7B $17.4B Excl F/X $6.0B +6% $18.5B +6% Inc. from Cont. Ops Befor
Slide 14: Retail Automotive
RETAIL AUTOMOTIVE
Slide 15: Retail Automotive Key Metrics
RETAIL AUTOMOTIVE KEY METRICS Same-Store Q3 ’23 Q3 ’22 Chg 9M ’23 9M ’22 Chg VOLUME METRICS New Units* 47,914 43,958 +9% 141,122 131,801 +7% Used Units 64,592 64,742 -- 192,122 199,142 (4%) Total 112,506 108,700 +4% 333,244 330,943 +1% Agency Units 7,415 --- nm 20,843 --- nm Total Units 119,921 108,
Slide 16: Retail Automotive Same-Store Revenue
RETAIL AUTOMOTIVE SAME-STORE REVENUE Q3 ’23 Q3 ’22 CHG 9M ’23 9M ’22 CHG New Vehicle $2,727 $2,373 +15% $8,059 $7,116 +13% Used Vehicle $2,263 $2,183 +4% $6,691 $6,872 (3%) F&I $206 $206 -- $612 $636 (-4%) Service & Parts $658 $601 +10% $1,933 $1,756 +10% Fleet & Wholesale $358 $334 +7% $1,082 $1,01
Slide 17: CarShop Used Vehicles
CARSHOP USED VEHICLES
Slide 18: CarShop Performance Summary
PERFORMANCE SUMMARY Q3 Units Q3 Revenue (in Millions) Q3 Gross/Unit $459 $2,668 18,451 17,567 17,916 $438 $406 $2,082 $1,950 Q3 '21 Q3 '22 Q3 '23 Q3 '21 Q3 '22 Q3 '23 Q3 '21 Q3 '22 Q3 '23 9M Units 9M Revenue ($ in Millions) 9M Gross/Unit 57,214 55,287 $1,423 $2,573 $1,390 $1,089 $2,111 $2,028 48,558
Slide 19: Premier Truck Group
PREMIER TRUCK GROUP
Slide 20: Premier Truck Group
PREMIER TRUCK GROUP One of the largest dealership groups for Daimler Trucks N.A. Retails new and used Freightliner and Western Star Trucks Acquired Transolutions Truck Centres in the greater Winnipeg, Manitoba market area with 5 locations and $180 million in expected annualized revenue 44 lo
Slide 21: Retail Commercial Truck Key Metrics
RETAIL COMMERCIAL TRUCK KEY METRICS Same-Store Q3 ’23 Q3 ’22 Chg 9M ‘23 9M ‘22 Chg VOLUME METRICS New Units 4,505 5,365 (16%) 12,886 12,293 +5% Used Units 868 666 +30% 2,172 2,115 +3% Total Units 5,373 6,031 (11%) 15,058 14,408 +5% GROSS PER UNIT New $8,346 $6,787 +23% $7,831 $7,185 +9% Used $5,431
Slide 22: Retail Commercial Trucks Performance Summary
RETAIL COMMERCIAL TRUCKS PERFORMANCE SUMMARY Q3 Units Q3 Revenue (in Millions) Q3 EBT ($ in Millions) 6,031 $1,020 $965 $61.1 4,820 5,556 $717 $48.3 $52.8 Q3 '21 Q3 '22 Q3 '23 Q3 '21 Q3 '22 Q3 '23 Q3 '21 Q3 '22 Q3 '23 9M Units 9M Revenue ($ in Millions) 9M EBT ($ in Millions) 14,897 15,971 $2,581 $2
Slide 23: Penske Australia & New Zealand
PENSKE AUSTRALIA & NEW ZEALAND
Slide 24: Penske Australia/New Zealand
PENSKE AUSTRALIA/NEW ZEALAND Exclusive importer and distributor of certain heavy/medium-duty trucks, buses and refuse collection vehicles – Western Star, MAN, Dennis Eagle; Distributor of diesel/gas engines and power systems – MTU, Detroit Diesel, Allison Transmission, and Bergen engines Parts
Slide 25: Penske Transportation Solutions
PENSKE TRANSPORTATION SOLUTIONS
Slide 26: Penske Transportation Solutions (PTS)
PENSKE TRANSPORTATION SOLUTIONS (PTS) Penske Truck Leasing Truck Full-Service Contract Used Rental Leasing Maintenance Trucks Penske Logistics Dedicated Distribution Freight Professional Contract Center Management Services Carriage Management & Brokerage PENSKE AUTOMOTIVE GROUP / 26
Slide 27: PTS Highlights
PTS HIGHLIGHTS Managed fleet of over 442,000 trucks, tractors and trailers Q3 2023 Highlights: OPERATING REVENUE (For the three months ended Sep 30, 2023) Operating revenue of $2.8 billion, +4% Net income of $291 million, down 38% Logistics Return on sales 11% 27% 9M 2023 Highlights: 47%
Slide 28: PTS Performance Summary
PTS PERFORMANCE SUMMARY Operating Revenue ($ in Billions) Net Income ($ in Millions) $469 $2.7 $2.8 $2.4 $409 $291 Q3 '21 Q3 '22 Q3 '23 Q3 '21 Q3 '22 Q3 '23 $1,351 $7.6 $8.1 $6.7 $949 $824 9M '21 9M '22 9M '23 9M '21 9M '22 9M '23 PENSKE AUTOMOTIVE GROUP / 28
Slide 29: PTS Fleet Growth
PTS FLEET GROWTH Managed fleet consists of trucks, tractors and trailers under lease, rental and/or maintenance contracts (Units in Thousands, amounts as of 12/31 unless otherwise noted) 442 416 360 327 327 297 271 247 231 215 205 201 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Sept. 2023
Slide 30: Omni Channel & Digital
OMNI CHANNEL & DIGITAL
Slide 31: Spectrum of Retail Operations
SPECTRUM OF RETAIL OPERATIONS 100% Online 100% In-Store End-to-End Platform OEM Programs Digital Retailing In-Store CarShop USA OEM powered solutions Enabling customers to In-person transaction at for brand integration shop how they choose the dealership Benefit from OEM Integrated end-to-end market
Slide 32: Digital Retailing to Modern Retailing
DIGITAL RETAILING TO MODERN RETAILING Evolved from a web tool to an integrated digital engagement platform Parallel technology to flow from online to in-store Data follows customer from web to showroom Leverage the same system if the customer starts in store Working deal alongside of custo
Slide 33: Digitizing Sales and Service
DIGITIZING SALES AND SERVICE SALES SERVICE Hybrid Purchase Process Through Dealer Websites AI Service Scheduling Immersive Chat and Text Immersive Chat and Text (AI to human-powered) (AI to human-powered) Virtual Test Drives and Photo Vehicle Walkarounds Estimating Trade/Sell Valuations Vehicle Stat
Slide 34: Non-GAAP Reconciliations
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Slide 35: EBITDA Reconciliation
EBITDA RECONCILIATION The following tables reconcile reported net income to earnings before interest, taxes, depreciation, and amortization (“EBITDA”) for the three and nine months ended September 30, 2023 and 2022 Three Months Ended Change Nine Months Ended Change September 30, 2023 vs 2022 Septemb
Slide 36: EBITDA & Leverage Ratio Reconciliation
EBITDA & LEVERAGE RATIO RECONCILIATION The following table reconciles EBITDA and the leverage ratio for the trailing twelve months ended September 30, 2023 ($ in Millions) Three Nine Trailing Twelve Months Ended Months Ended Months Ended December 31, 2022 September 30, 2023 September 30, 2023 Net In
Slide 37: EBITDA, Adj. EBITDA & Leverage Ratio Reconciliation
EBITDA, ADJ. EBITDA & LEVERAGE RATIO RECONCILIATION The following table reconciles EBITDA, Adj. EBITDA and Leverage Ratio as of December 31, 2022, 2021, 2020 and 2019 ($ in Millions) 12M ‘22 12M ’21 12M ’20 12M ‘19 Net Income $1,386.2 $1,192.7 $545.3 $435.1 Add: Depreciation $127.3 $121.5 $115.5 $10
Slide 38: Agency
Beginning in 2023, we transitioned our Mercedes-Benz U.K. dealerships, and a limited number of our other dealerships, to an agency model under which these dealerships receive a fee for facilitating the sale by the manufacturer of a new vehicle but do not hold the vehicle in inventory. Vehicles sold
Slide 39: Automotive
Automotive
Penske Automotive Group — Q3 2023 Earnings Presentation on 6ix